Benchmarks chalked up further gains on the back of investor
optimism. Meanwhile, the Dow Jones and the S&P 500 reached
all-time highs following a series of encouraging economic reports
this week. Among the top ten S&P 500 industry groups,
materials stocks emerged as the biggest gainers while utilities
were the only losers.
The Dow Jones Industrial Average (DJI) increased 0.3% to close
the day at 15,105.12. The S&P 500 gained 0.4% to finish
yesterday's trading session at 1,632.69. The tech-laden Nasdaq
Composite Index rose 0.4% to end at 3,413.27. The fear-gauge CBOE
Volatility Index (VIX) decreased 1.3% to settle at 12.66.
Consolidated volumes on the New York Stock Exchange, American
Stock Exchange and Nasdaq were roughly 6.2 billion shares,
marginally below 2013's average of 6.36 billion shares. Advancing
stocks outnumbered the decliners. For the 66% that advanced, 30%
The Dow progressed from yesterday's record close, chalking up
gains for the second consecutive day while the S&P 500
advanced for the fifth day in a row. The Dow, the S&P 500 and
the Nasdaq have gained 14.5%, 15.3% and 13% respectively this
year. Better-than-expected payroll data, which was released last
week, acted as a catalyst for benchmarks. Additionally,
encouraging German factory output data along with positive export
and import data from China, released recently, delivered a boost
to investor sentiment.
Last week, the Federal Reserve had decided to continue ongoing
monetary stimulus until inflation declines to 2.0% and the
unemployment rate touches 6.5%. The unemployment rate is
gradually decreasing as the economy gathers steam. However,
Personal Consumption Expenditure (PCE) price index is 1%, the
lowest level in more than three years. Moreover, according to the
Fed, the inflation rate is likely to stay below the Central
Bank's expectation for years.
Inflation in an economy is measured by two indices Consumer
Price Index (CPI) and PCE. The CPI index for the month is 1.5%
while the PCE index is 1.0%. Their core counterparts, core CPI
index and core PCE index are 1.9% and 1.0% respectively
indicating the biggest gap in the past ten years. However, for
now, the Fed has decided to continue with its monetary easing
According to the Economy Ministry in Berlin, industrial
production increased by 1.2% from the previous month's figure in
March. This data indicates an increase in industrial output for
the second month in a row and above market estimates of -0.1%.
German's manufacturing output rose 1.4% while energy production
advanced 4% for the month. Production of investment goods surged
2.1% whereas construction activity declined 3.1%. The decline in
construction activity is attributable to cold weather. This data
came in a day after Germany reported an unexpected increase in
international and domestic factory orders.
Services and manufacturing output decreased for the 15th
consecutive month in April while retail sales dropped in March.
The European Commission expects the Euro Zone economy to contract
by 0.4% this year compared to a contraction of 0.6% in 2012. ECB
president, Mario Draghi, indicated a further rate cut if the
economy worsens. While the Euro Zone economy may be facing tough
times, the German economy is showing signs of gradual
On the earnings front, shares of Monster Beverage Corp
) dropped 0.3% after its earnings missed the Street's estimates.
However, the company's sales increased. The company said the
decrease in earnings is because of legal expenses and allegations
that it markets highly caffeinated drinks to children.
Of the top ten S&P 500 industry groups, utilities stocks
gained the most. The Materials Select Sector SPDR (XLB) gained
0.9%. Stocks such as Monsanto Company (NYSE:
), FMC Corp (NYSE:
), E I Du Pont De Nemours And Co (NYSE:
), Freeport-McMoRan Copper & Gold Inc. (NYSE:
) and PPG Industries, Inc. (NYSE:
) gained 0.9%, 1.9%, 0.1%, 2.7 and 1.7%, respectively.
Utilities stocks were the only losers. The Utilities SPDR
(XLU) lost 0.9%. Stocks such as Duke Energy Corp (NYSE:
), Dominion Resources, Inc. (NYSE:
), Xcel Energy Inc. (NYSE:
), American Electric Power Company, Inc. (NYSE:
) and PPL Corporation (NYSE:
) decreased 1.1%, 0.7%, 1.0%, 0.9% and 1.3%, respectively.
AMER ELEC PWR (AEP): Free Stock Analysis
DOMINION RES VA (D): Free Stock Analysis
DU PONT (EI) DE (DD): Free Stock Analysis
DUKE ENERGY CP (DUK): Free Stock Analysis
FREEPT MC COP-B (FCX): Free Stock Analysis
FMC CORP (FMC): Free Stock Analysis Report
MONSTER BEVERAG (MNST): Free Stock Analysis
MONSANTO CO-NEW (MON): Free Stock Analysis
PPG INDS INC (PPG): Free Stock Analysis
PPL CORP (PPL): Free Stock Analysis Report
XCEL ENERGY INC (XEL): Free Stock Analysis
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